Credit Card insurance in Canada: Everything You Need to Know about Coverage, Limitations and How it Works

How many of you have signed up for a credit card that includes insurance? Probably a lot. But, do you actually use that insurance? Do you even know what you are covered for? If you answered no, don’t worry. That’s what this article is for. We’re going to dive into the different types of credit card insurance in Canada so you can better choose a credit card based on your needs and/or take full advantage of the credit cards you already have.

There are 17 different types of credit card insurance in Canada. Of course, no credit card offers all 17. However, premium credit cards tend to offer the highest number of options but even no-fee credit cards typically offer some sort of coverage. Here is everything you need to know about credit card insurance in Canada and how it works.

If you are struggling to figure out which credit card is best for your needs, take a look at the Hardbacon Credit Card Comparator.

Credit Card Insurance in Canada: Types of Insurance Coverage

As mentioned above, there are 17 different types of credit card insurance offered on Canadian credit cards. Here’s a breakdown of each type of insurance and what it covers.

Credit Card Purchase Protection

Purchase protection is one of two types of credit card insurance included on the majority of credit cards. Purchase protection covers any lost, stolen, or damaged purchases. Coverage for this insurance usually lasts 90 days though there are some credit cards that cover for longer.

Credit Card Extended Warranty

In addition to purchase protection, extended warranty is one of the most common types of credit card insurance. With extended warranty, your credit card essentially doubles the length of coverage offered in the initial warranty offered by the manufacturer. For example, if the manufacturer warranty is for 30 days, after those initial 30 days are up the credit card extended warranty will kick in and cover you for another 30 days, giving you a total of 60 days of coverage. Keep in mind, the depending on the credit card there will be a limit of the warranty extension (typically 1-2 years).

Emergency Medical Credit Card Insurance

If you are a traveller (even if just out of province) this is a key type of insurance that you want to have to ensure that your medical bills will be covered if you get injured or sick while travelling. This type of credit card insurance tends to be specific to premium travel credit cards.

Insider tip: The National Bank World Elite Mastercard offers the longest emergency medical coverage in Canada: 60 days.

Emergency Medical Over 65 Credit Card Insurance

This is the same type of coverage as emergency medical. However, typically, emergency medical credit card insurance only covers individuals up to the age of 65. So, if you are over that age group you want to keep your eye out for coverage that fits your age range. It does exist, it’s just not as common.

Insider Tip: The Scotiabank Passport Visa Infinite card covers anyone over the age of 75!

Mobile Device Credit Card Insurance

Mobile device insurance is incredibly handy to have but isn’t too common in Canada. With this type of credit card insurance, your mobile phone (or tablet) is covered against being lost, stole, or damaged. Now, the coverage amount won’t be the full value of the lost or damaged device, however, getting something is back is always better than getting nothing.

Travel Accident Credit Card Insurance

It’s not the type of travel insurance we want to have to use, however, it’s a good one to have. Should you suffer dismemberment or even lose your life while travelling, travel accident insurance will cover you up to a certain amount (depending on the type of accident) and send your family a lump sum payment. Again, this type of insurance is typically offered by premium travel credit cards.

Trip Cancellation Credit Card Insurance

If you are someone who tends to book non-cancellable hotels and flights for travel, then this is a type of credit card insurance you should keep your eye out for. Should you have to cancel your travels (for an emergency reason specified by the credit card) then this insurance will help you get your money back. The limits aren’t very high so don’t expect to be reimbursed in full for an over-the-water bungalow in the Maldives. However, getting some money back is better than losing it all!

Trip Interruption Credit Card Insurance

Should something happen to your mid-trip and you need to return home, trip interruption insurance will help you sort any additional travel costs. Of course, the reason for cutting your trip short does need to be an approved emergency but, again, this is a good type of travel credit card insurance to have on hand.

Insider Tip: The National Bank World Elite Mastercard offers the highest coverage for both trip cancellation and trip interruption insurance ($2,500 and $5,000 respectfully)

Baggage Delay Credit Card Insurance

If your bag is delayed for a certain amount of time (predetermined by the credit card) you will be allocated funds to pick up some essentials including clothing until your baggage arrives.

Lost/Stolen Baggage Credit Card Insurance

Should your baggage actually be lost or stolen, insurance will cover the cost of replacing your belongings. Now, chances are the amount offered to you (usually $500/person) won’t cover the total value of your belongings, however, most airlines also have a policy for this and you may be able to combine the airline’s coverage with your credit card insurance.

Flight Delay Credit Card Insurance

If your flight is delayed several hours (the length of time is predetermined by your credit card) then your card will cover you and perhaps your travelling companions as well for any incurred expenses including food and accommodation. Something to note: in some instances, this coverage amount is also spread across baggage delay as well as lost/stolen baggage coverage.

Hotel Burglary Credit Card Insurance

In case your bags or personal items are stolen from your hotel room, this insurance will cover (up to a limit) the value of what is missing. Keep in mind this insurance does apply to all personal items.

Personal Effect Credit Card Insurance

A very rare type of credit card coverage, this insurance will cover any personal belongings that are lost, stolen, or damaged at any point of your trip. Unlike baggage coverage, this isn’t just your bag; its actual items. Although, there are exclusions and/or limitations on high end electronics or jewellery.

Rental Car Personal Effects Insurance

Rental car personal effects insurance to hotel burglary is very similar to hotel burglary insurance, except the theft or damage takes place when the objects are in your car, not your hotel room. Depending on the credit card you have, you may not even have to be in the car at the time of the theft/damage.

Rental Car Theft & Damage Credit Card Insurance

This is one of the typical types of credit card insurance offered by many Canadian credit cards. Keep in mind this coverage applies only to the vehicle itself, not items inside or the passengers.

Most car rental companies will try to add this onto your bill, however, if your credit card includes this type of insurance there is no need to pay for it again. Granted, should something happen the money will have to come out of your pocket first for the repairs before you can make the claim. But, by choosing to go with your credit card coverage (included in the cost of your card) rather than that offered by the rental company, you can easily save yourself about $30 per day.

Rental Car Accident Credit Card Insurance

This type of accident does not cover any medical bills or damage costs to the vehicle and/or property, however, if you are seriously injured or if the accident results in death, the insurance company will pay out a lump sum. Payment will depend on the severity of the injury.

Insider tip: BMO Air Miles World Elite Mastercard offers the best coverage for this; up to $200,000.

Event Ticket Cancellation Credit Card Insurance

As you can guess from the name, event ticket cancellation will reimburse you for a ticket to a sporting event or concert/theatre show (assuming you can’t attend for a covered reason). The reimbursed value is either the cost of the ticket or the maximum amount covered, whatever is less. This is considered to be the rarest type of credit card insurance in Canada and is currently only offered by Brim Financial credit cards.

Credit Card Price Protection

Price protection isn’t common on many Canadian credit cards, but it’s worth keeping an eye out for. Price protection will reimburse you the difference in price should you buy a product only to see it go on sale after you have made the purchase (perishable items such as food are typically excluded) within a certain amount of time. This could be at the same store in which you made the purchase, or somewhere else at a lower cost. Keep in mind that most cards that offer this type of coverage have an annual or lifetime limit on the amount you can claim back.

Credit Card Insurance in Canada: How it Works

So, now that you know what types of credit card insurance are available to you, let’s dig into how it works. First and foremost, you need to make the full purchase you are trying to get coverage for (your phone, your vacation, your car rental etc.) with your credit card. If you only make a partial payment on the card, you are not covered.

Secondly, it’s important to get in touch with your credit card provider as soon as something happens. Don’t wait until you come home. Call the number on the back of your card to start the process right away.

Credit Card Insurance in Canada: Limitations

While credit card insurance can be a huge benefit, it’s important to know the limitations and what exactly you are covered for. For this reason, it is always recommended to read the fine print and be aware of what the insurance entails and any requirements that need to be in place for the incident to qualify.

Common limitations include:

  • Length of coverage. For example, most emergency medical coverage is only valid for 15 days.
  • Value of coverage (what is the maximum amount covered by insurance?). For example, most credit cards will only pay out $500 per person for lost or stolen baggage.
  • Location: Where did the incident take place? For example, hotel burglary claims mean the theft must have taken place in the hotel, not during transit to the hotel.

Each credit card coverage is different. Some offer longer, better, or higher coverage but it is your job to know what and how much you are covered for. This information can be found in the fine print in the documents including with your credit card when you first get it mailed to you as well as online. If you are unsure and have any specific questions, get in touch with your credit card provider who can answer provide clarity on the subject.

Final Tips on Credit Card Insurance in Canada

Credit card insurance is something that most of us have, but fail to utilize. Which is pretty silly. If you have it, you may as well use it. Especially since, in the case of premium credit cards, you are paying for these services. That being said, don’t become too reliant on these types of insurance without reading the fine print. As mentioned above, there are plenty of limitations in place, so familiarize yourself with your coverage to ensure that you can plan accordingly.

Hannah is a Canadian-based writer who specializes in personal finance, travel and lifestyle. She has been writing online since 2014 and her work has appeared in various online media.